“In 2017, exports will improve...as the global economy recovers gradually,” the Korea Development Institute (KDI) said in a report.

Despite the sunnier outlook, growth this year would lag last year’s 2.8 percent expansion because of sluggish domestic consumption, it said.

Next year’s GDP growth was expected to be a slightly slower 2.5 percent.

The research institute said economic growth would be impaired if protectionist policies were to spread quickly to many countries or if geopolitical issues around North Korea were to debilitate consumer or investor sentiment.

The Bank of Korea last week upgraded its growth outlook for this year to 2.6 percent from 2.5 percent, while its 2018 growth projection is 2.9 percent.

Last December the finance ministry forecast economic growth for this year at 2.6 percent, although it may revise its outlook in coming months.